Baird Still Isn't Buying Biogen

While reporting a significant EPS beat for Q2, Biogen Inc BIIB also announced the departure of its CEO. Baird’s Brian P. Skorney maintained a Neutral rating on the company, with a $268 price target.

The stock appreciated following the announcement, since “investors have largely held Scangos accountable for the stock's underperformance over the last year,” Skorney mentioned, while adding, “[B]ut we're not so sure the departure is a signal of improving fundamentals.”

Q2 Earnings

The company reported its non-GAAP diluted EPS at $5.21, 10 percent above the estimate and the consensus, driven by higher than expected revenues, which also beat the estimate and the consensus. The beat was also aided by lower operating expenses.

Related Link: Biogen's Q2 Numbers, Outlook Exceed Street Expectations

Management significantly raised the EPS guidance, due to modestly higher revenue for the year, along with lower guidance for R&D and SG&A than previously guided.

MS Sales

“Biogen's MS franchise produced $2.23B in sales in the second quarter, up from $2.11B in Q1 and $2.06B in 1Q15,” Skorney stated.

MS sales modestly beat expectations, and while no inventory gains were specifically mentioned, the analyst believes that sales benefited from inventory builds during Q2.

Buyback Authorization

In addition, Skorney expressed regarding Biogen’s buyback authorization of $5 billion, which is almost the same amount the company raised in debt offering in the fall of 2015 and had been seen as a signal that the company would undertake acquisitions.

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